Evidence Builds for DeLorenzo's Lincoln

October 16, 2002 | Dr. Paul Craig Roberts

[l8pilot]

Evidence Builds for DiLorenzo’s Lincoln by Paul Craig Roberts

In an excellent piece of historical research and economic exposition, two economics professors, Robert A. McGuire of the University of Akron and T. Norman Van Cott of Ball State University, have provided independent evidence for Thomas J. Dilorenzo’s thesis that tariffs played a bigger role in causing the Civil War than slavery.

In The Real Lincoln, DiLorenzo argues that President Lincoln invaded the secessionist South in order to hold on to the tariff revenues with which to subsidize Northern industry and build an American Empire. In "The Confederate Constitution, Tariffs, and the Laffer Relationship" (Economic Inquiry, Vol. 40, No. 3, July 2002), McGuire and Van Cott show that the Confederate Constitution explicitly prohibits tariff revenues from being used "to promote or foster any branch of industry." By prohibiting subsidies to industries and tariffs high enough to be protective, the Confederates located their tax on the lower end of the "Laffer curve."

The Confederate Constitution reflected the argument of John C. Calhoun against the 1828 Tariff of Abominations. Calhoun argued that the U.S. Constitution granted the tariff "as a tax power for the sole purpose of revenue – a power in its nature essentially different from that of imposing protective or prohibitory duties."

McGuire and Van Cott conclude that the tariff issue was a major factor in North-South tensions. Higher tariffs were "a key plank in the August 1860 Republican party platform. . . . northern politicians overall wanted dramatically higher tariff rates; Southern politicians did not."

"The handwriting was on the wall for the South," which clearly understood that remaining in the union meant certain tax exploitation for the benefit of the north.

October 16, 2002

Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy and Senior Research Fellow at the Hoover Institution, Stanford University. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions Evidence Builds for DiLorenzo’s Lincoln by Paul Craig Roberts

In an excellent piece of historical research and economic exposition, two economics professors, Robert A. McGuire of the University of Akron and T. Norman Van Cott of Ball State University, have provided independent evidence for Thomas J. Dilorenzo’s thesis that tariffs played a bigger role in causing the Civil War than slavery.

In The Real Lincoln, DiLorenzo argues that President Lincoln invaded the secessionist South in order to hold on to the tariff revenues with which to subsidize Northern industry and build an American Empire. In "The Confederate Constitution, Tariffs, and the Laffer Relationship" (Economic Inquiry, Vol. 40, No. 3, July 2002), McGuire and Van Cott show that the Confederate Constitution explicitly prohibits tariff revenues from being used "to promote or foster any branch of industry." By prohibiting subsidies to industries and tariffs high enough to be protective, the Confederates located their tax on the lower end of the "Laffer curve."

The Confederate Constitution reflected the argument of John C. Calhoun against the 1828 Tariff of Abominations. Calhoun argued that the U.S. Constitution granted the tariff "as a tax power for the sole purpose of revenue – a power in its nature essentially different from that of imposing protective or prohibitory duties."

McGuire and Van Cott conclude that the tariff issue was a major factor in North-South tensions. Higher tariffs were "a key plank in the August 1860 Republican party platform. . . . northern politicians overall wanted dramatically higher tariff rates; Southern politicians did not."

"The handwriting was on the wall for the South," which clearly understood that remaining in the union meant certain tax exploitation for the benefit of the north.

October 16, 2002

Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy and Senior Research Fellow at the Hoover Institution, Stanford University. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions

[andy_card]

Yet I look into the istory of this country, and there was a time, a long time, citizens were not in bondage to this government.

1. Nobody is in bondage to the Government. The Government provides us with services, some of them good, many of which are bad. We pay taxes, for example, so that our military can keep invading armies from pillaging our land, raping our women, and killing our children. If you don't like it, you can leave. But we will always need taxation if we want to live and prosper.

2. Taxation has always existed, time whereof the memory of man runneth not to the contrary. At no point has this country, or any country, not taxed its own people, either directly or indirectly.

3. I don't like to pay taxes. I think taxes are much too high. But even assuming the socialists get their way and we wind up with 90% taxation, no rational person would trade places, even for a moment, with a slave. You clearly have no inkling of what true oppression means.

[WhiskeyPapa]

I would suppose that this proves that General Sherman was God Almighty's terrible swift sword.

Maybe.

Walt

[colorado tanker]

I always shake my head at the irony of these threads. Lincoln, like Jefferson, was a natural rights man, holding that the principles of the Declaration announce fundamental rights no government can legitimately take away. In contrast, John Calhoun and Jefferson Davis were positivists and historicists, the very philosophies that justify tyrannical government.

[WhiskeyPapa]

God has allowed this to show men that they are incapable of governering in their own human wisdom.

OH MY GOODNESS!

This is the exact sort of thinking that would have crowned King Rooney the First had the slave power been a bit more canny.

Walt

[GOPcapitalist]

Yes, I've heard it all before from southern supporters of today, but damned little from the southern leaders of the time. You don't suppose it's because tariffs were a very minor issue when compared with slavery, do you?

You must not have read much from the time then. At least one leading scessionist said it was the central issue and based upon it, concluded that secession was the only course.

"You suppose that numbers constitute the strength of government in this day. I tell you that it is not blood; it is the military chest; it is the almighty dollar. When you have lost your market; when your operatives are turned out; when your capitalists are broken, will you go to direct taxation? Burn down a factory that yields ten, fifteen, twenty, twenty-five thousand dollars a year to its owner and he goes to the wall. Dismiss the operatives, stop the motion of his machinery, and he is as thoroughly broken as if his factory were burnt; for the time he is bankrupt. These are matters for your consideration. I know that you do not regard us as in earnest. I would save this Union if I could; but it is my deliberate impression that it cannot now be done." - Sen. Louis T. Wigfall, December 1860 (emphasis added)

[uncbob]

Rationalization. For 4 million blacks in the south, hard labor began at age 6 or earlier. Immigrants came to America for the opportunity to work. They could have as easily gone to the south as the north but because of slavery they were neither needed nor welcome there. Slavery kept the south backward and kept most white southerners poor. ,br>
Wasn't rationaling but stating ecomonic reality

BTW I read in one account when they were draining the swamps in LA they didn't use slaves because the death toll was too high and slaves could no longer be imported
So they used Hibernians ( Irish) as they stated another boatload will be along next week

[Ditto]

I feel this is what drives a lot of the neo-rebs. Maybe a run-in with the IRS, or a zoning thing, or an easement or title conflict -- something soured them on the government.

It would be a good thing to remind some folks around here that when the ink on the Constitution was still damp, this nation had things such a debtors prisons! One of the signers of the DoI and the money man who financed the Revolution, Robert Morris, ended up in one of those stinking holes. There was no grace period for delinquent taxes --- pay now or the sheriff puts you off the land and a speculator picks it up. Property speculation was rampant and totally unscrupulous. Even Daniel Boone was swindled out of his property in Kentucky in the years after the Revolution. Many poor farmers in the old Southwest were ruined by swindlers when the big cotton plantation owners decided to expand. Laws and the rule of law were still a hit or miss thing in those days. Freedom was broad for both the honest and the dishonest, but security, property rights, and the predictability that makes lasting prosperity possible were scarce. Enter the law, which like speed limits, so many seem to despise. They need to consider what their life would be like without those protections.

[GOPcapitalist]

Over 75% of tariff revenue was collected in the North

The point of revenue collection in itself tells practically nothing about a tariff's economic impact with all things considered. If you want to take up this topic, go educate yourself about trade theory. Otherwise don't shoot your mouth off with uninformed conclusions that lack the necessary information to even begin an analysis.

[WhiskeyPapa]

But we will always need taxation if we want to live and prosper.

You know one of the funny things about the nirvana that CWWRINGERWINGER wants? The slave power opposed internal improvements for decades. Rail roads, canals, bridges --- they fought that tooth and nail. This was what the whigs, and Lincoln supported -- what DiLorenzo calls "corporate welfare."

Well of course the slave power got their wish -briefly- and were not burdened with being asked to provide internal improvements.

Then it turned out that the transportation system in the south was totally inadequate to fight a war! Ooops! Big ooops!

[stifling a chortle]

Okay, to continue. Wonder if CWWRINGERWINGER would have been willing to pay taxes to keep the Yankees out.

Nah, that smacks too much of wanting your cake and eating it too.

Walt

[Ditto]

I don't even have the tune-up concession for the Land Rovers on Ted Turner's ranch, which probably brings somebody a pretty penny.

Not to mention the buffalo chips your could scrape off the tires.

[GOPcapitalist]

The Georgia secession document even mentions "the free trade environment now prevailing" or words to that effect.

Yeah, but goes on to say that the protectionists had reorganized and found a way to achieve the strength in government needed to push their agenda. History verifies this in the form of the Morrill Tariff Act.

[WhiskeyPapa]

James Wilson, signer of the D of I, delegate to the constiutional convention, and Supreme Court Justice also wound up penniless and hounded by the sheriff too.

Walt

[uncbob]

They could have as easily gone to the south as the north but because of slavery they were neither needed nor welcome there. Slavery kept the south backward and kept most white southerners poor.

Also South wasn't as industrialized as the north
In addition the Irish in New York rioted against the draft because they didn't want to fight against the south because if slavery ended they perceived blacks as taking their jobs

[stainlessbanner]

I'll bet dollars to donuts that nobody who commented on this thread has actually read McGuire and Van Cott's work. Anyone?

It's the same old rhetoric and insults. I noticed the DiLorenzo insults (mostly by those who have not read his work either) and the "neo-reb" comments by the same 'ol hooligans.

l8pilot gave ya'll a headstart by citing a source. Go read it and organize your rebuttal if you disagree with the paper.

[WhiskeyPapa]

Not to mention the buffalo chips your could scrape off the tires.

ROFLMAO!!

Saw an interview with Turner a while back, where he stood up and idly checked a PC while he was being interviewed.

According to the interviewer he said without turning a hair, "I just lost ninety million dollars."

Walt

[WhiskeyPapa]

Yeah, but goes on to say that the protectionists had reorganized and found a way to achieve the strength in government needed to push their agenda.

That's how democracy works.

You do pine for King Rooney don't you?

Yes, KING ROONEY LEE THE FIRST!!!

Walt

[Non-Sequitur]

I say that cotton is king, and that he waves his scepter not only over these thirty-three States, but over the island of Great Britain and over continental Europe, and that there is no crowned head upon that island, or upon the Continent, that does not bend the knee in fealty and acknowledge allegiance to that monarch. There are five million people in Great Britain who live upon cotton. You may make a short crop of grain, and it will never affect them; but you may cram their granaries to bursting, you may cram them until the corn actually is lifting the shingles from the roofs of their barns, and exhaust the supply of cotton for one week and all England is starving; and we know what men do when suffering from famine. They do not burst open barns and divide the corn. In their frenzy they burn and destroy.

We shall never again make less than five million bales. I know that Senators on the other side suppose that when "this glorious Union" is disrupted it will be in blood, and that our negroes will rise in insurrection. We understand it well enough to make the experiment, and I say to Senators upon that side that next year they will see the negroes working as quietly and as contentedly as if their masters were not leaving that country for a foreign land, as they did a few years ago when they were called upon to visit the Republic of Mexico. We understand that question.

Five million bales of cotton, each bale worth fifty dollars at least - fifty-four dollars was the average price of cotton last year - give us an export of $250,000,000 per annum, counting not rice, or tobacco, or any other article of produce. Two hundred and fifty million exports will bring into our own borders - not through Boston and New York and Philadelphia, but through our own ports - $250,000,000 of imports; and forty per cent upon that puts into our treasury$100,000,000. Twenty per cent gives us $50,000,000. What tariff we shall adopt, as a war tariff, I expect to discuss in a few months, and in another Chamber.

You suppose that numbers constitute the strength of government in this day. I tell you that it is not blood; it is the military chest; it is the almighty dollar. When you have lost your market; when your operatives are turned out; when your capitalists are broken, will you go to direct taxation? Burn down a factory that yields ten, fifteen, twenty, twenty-five thousand dollars a year to its owner and he goes to the wall. Dismiss the operatives, stop the motion of his machinery, and he is as thoroughly broken as if his factory were burnt; for the time he is bankrupt.

These are matters for your consideration. I know that you do not regard us as in earnest. I would save this Union if I could; but it is my deliberate impression that it cannot now be done.

Your irrepressible conflict is predicated upon the supposition that this is a consolidated Government; that there are no States; that there is a national Government, as they call it; that the people who live between the two oceans and between the Gulf and the lakes are one people; that the boundaries of Massachusetts have, by some hocus pocus, been extending themselves until they embrace all the remainder of the Union; and that we are one people, have a national Government, and are under the control of "the Massachusetts school of politics," as the Senator from New York said he was. This is the fatal error. If you could have seen it in time much of this difficulty would have been avoided. We see and we know and we feel that you are administering this Government upon the idea that there is but one single State or nation, and that you, under these impressions, believe that you are responsible for the domestic institutions of all the other States.

OK, I give up. Where does it say that the southern rebellion was about tariffs?

BTW, can you point out a single point in his tirade where Wigfall was right in predictions?

[GOPcapitalist]

think people during this era where much more knowledgeable about economic matters than we are today.

You are on to something here. I would add that this is evidenced on this very thread among those who discount the tariff's role. Many like to throw out stats that more physical import tariff revenues were collected in northern ports than southern ones, then conclude the issue settled. They ignore basic economics in doing so by neglecting the primary costs incurred by a protectionist tariff. The cost is not revenue, but the act of protection itself felt in higher prices, not to mention export shifs and foreign retaliation. The same people who cite import stats almost always neglect export stats, which show the South exported the overwhelming majority.

When a tariff is installed, domestic prices go up thanks to that tariff and the writing of foreign competitors out of the domestic economy. Imports pay for exports making the two inescapably separable. It's as Bastiat said - when goods do not cross borders freely, armies will.

[GOPcapitalist]

You've lost your damned mind. Any nation that had slavery incorporated into its founding constitution was in no way correct.

Then do you favor the repeal of the United States Constitution?

[Ditto]

So they used Hibernians ( Irish) as they stated another boatload will be along next week

I have heard the same story and I don't doubt it. There is a to this day a large Irish subculture in New Orleans that dates back to that time. I have talked to some and they sound like they are from Brooklyn.

I'm not sure that it was the 'death' issue however that lead immigrants to those jobs. Draining those swamps were public work projects and the government would either have to hire slaves from their owners or hire "freemen". Since sugar and rice crops were so profitable at the time it's doubtful that many plantation owners would forgo a crop to rent their slaves out to the government, and if they had, they probably would have charged more (opportunity costs) than what the Irish were willing to work for.

It would be interesting to see what the real history of those stories are.